Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce industry has been abuzz with the news of Meesho’s initial public offering (IPO), which has been making headlines for all the wrong reasons. In a shocking turn of events, Meesho’s anchor book has faced investor withdrawals after a significant allocation to SBI Funds Management, prompting other large funds to exit in protest. This development has raised eyebrows and sparked a debate about the allocation process in the Indian IPO market.
According to reports, Meesho had allocated a substantial portion of its anchor book to SBI Funds Management, which did not go down well with other large investors. As a result, several prominent funds, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, among others, withdrew from the IPO in protest. This mass exodus has raised concerns about the fairness and transparency of the allocation process.
Despite this setback, Meesho’s IPO lineup still boasts an impressive array of global investors, including GIC and BlackRock. These marquee investors have shown faith in Meesho’s growth potential and business model, which is a positive sign for the company. However, the controversy surrounding the anchor allotment has cast a shadow over the IPO, and it remains to be seen how this will impact the overall response to the issue.
The anchor book is a critical component of an IPO, as it provides a platform for institutional investors to invest in the company before the public issue opens. The allocation of shares to anchor investors is typically done on a discretionary basis, and the company, along with its bankers, decides which investors to allocate shares to. In this case, the significant allocation to SBI Funds Management appears to have been the trigger for the investor protest.
The reasons behind the protest are not entirely clear, but it is believed that some investors felt that the allocation to SBI Funds Management was disproportionate and favored one investor over others. This perception of unfairness has led to a loss of trust among some investors, who have decided to withdraw from the IPO. The fact that several large funds have exited the IPO in protest has also raised questions about the allocation process and the role of bankers in facilitating these allocations.
The Meesho IPO has been one of the most highly anticipated issues in recent times, with the company looking to raise funds to fuel its growth plans. Meesho is a social commerce platform that allows users to buy and sell products, and it has been expanding its operations rapidly in recent years. The company’s IPO is seen as a significant milestone in its journey, and the controversy surrounding the anchor allotment has come as a setback.
The impact of this controversy on the Meesho IPO is still uncertain, but it is likely to have some bearing on the overall response to the issue. The company’s bankers will need to work hard to rebuild trust among investors and ensure that the IPO is a success. Meanwhile, the regulator, the Securities and Exchange Board of India (SEBI), will be closely watching the developments and may take steps to ensure that the allocation process is fair and transparent.
In conclusion, the Meesho IPO has hit a roadblock with the anchor allotment controversy, which has led to investor protests and withdrawals. While the company still has a strong lineup of global investors, the controversy has raised questions about the fairness and transparency of the allocation process. As the IPO market continues to evolve, it is essential to ensure that the allocation process is fair and transparent, and that all investors are treated equally. The Meesho IPO will be closely watched, and its success will depend on the company’s ability to address the concerns of investors and ensure a smooth allocation process.
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